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Thursday, February 2, 2012

Budget update, February 2

COW CAFR briefing February 6: The time of the February 6 COW briefing on the CAFR has been changed to 11:00 am to accommodate the regular pre-legislative meeting press briefing at 10 am.

DC leaders visit Wall Street: Mayor Vince Gray, Committee on Finance and Revenue chair Jack Evans, and others are heading to NYC for visits with the Wall Street rating agencies. The visits take place February 3.

Panel Discussion on Arts Funding in DC, February 8: DC Advocates for the Arts (DCAA), Institute for Policy Studies, and Busboys and Poets are sponsoring "Arts Funding in the District" February 8 from 6:00 – 7:00 pm at Busboys and Poets (14th and V Sts NW). Panelists are Andy Shallal, Ward 2 CM Jack Evans, and DCCAH Director Lionell Thomas. More information is available on the IPS website and on the DCAA website.

Public schools budget process through March: S.H.A.P.P.E. has shared the schedule for developing the DCPS budget; the remaining steps are here:

February*LSAT workshops*Budget allocations released to school leaders*Schools develop budget for submission to Chancellor*LSAT chairs sign off in Quickbase*Principals submit budget to Chancellor

National Association of State Budget Officers' take on federal budget and the states: The National Association of State Budget Officers (NASBO) has summarized the latest CBO report on the federal budget. While NASBO did not the discuss impact on the states, one can surmise it from what they did write about.

CBO Issues Updated Federal Budget Projections Highlighting Two Drastically Different FuturesOn January 31, the Congressional Budget Office released its 2012 budget and economic outlook showing that while 2012 is likely to produce the fourth consecutive year in which the federal government’s deficit topped one trillion dollars, the path for the federal budget in 2013 and beyond contains significant uncertainty. On one hand, if Congress were to allow current law to take place, referred to as CBO’s Baseline Projection, then 2013 would see the expiration of the 2001 and 2003 tax cuts along with implementation of the automatic budget cuts scheduled for January 1, 2013 that are the result of the failure of the Joint Select Committee. These items along with other provisions would reduce the deficit to below $600 billion in 2013 and continue reducing it to below $200 billion by 2018. However, such austerity, which CBO measured at $400 billion for 2013, could significantly impact economic growth and the unemployment rate. Growth in 2013 would fall to below 1.5 percent and unemployment would rise to above 9 percent. On the other hand, should Congress approve measures to undo this austerity, referred to as the Alternative Fiscal Scenario, economic growth will improve, possibly as high as four percent in 2013 but deficit levels will remain significantly elevated, remaining above $900 billion until 2017 when they would again be in excess of $1 trillion.

The report also notes that enhanced federal funding for Medicaid under the Recovery Act ($12 billion in 2011) will almost evaporate to $1 billion in 2012. Overall, federal spending on Medicaid will dip from $275 billion in 2011 to $262 billion in 2012, mostly because of this reduction in enhanced Recovery Act funding, although total spending is expected to increase significantly to $605 billion by 2022. Medicaid enrollment is projected to increase from 67 million in 2011 to 95 million in 2022, primarily due to provisions within the Affordable Care Act. Spending on the Children’s Health Insurance Program (CHIP) is expected to remain steady at $9 billion from 2011 to 2012 before jumping to $12 billion by 2015.…